Xstrata Zinc Enters Into Pact To Buy Canada Zinc Prospects
02 Juni 2011 - 8:29PM
Dow Jones News
Anglo-Swiss miner Xstrata PLC (XTA.LN) Thursday said it has
agreed to buy the Hackett River and Wishbone Greenstone belt
exploratory properties in Nunavut, Canada from Canada's Sabina Gold
& Silver Corp. (SBB.T).
Xstrata Zinc Canada, a unit of Xstrata, has agreed to pay Sabina
$50 million Canadian dollars in cash and will provide a silver
production royalty equal to 22.5% of the first 190 million ounces
of silver produced from Hackett River and other properties and
12.5% thereafter from both Hackett River and Wishbone.
Xstrata will commit a further C$50 million to complete a
bankable feasibility study within four years of the deal's
close.
The deal is expected to take four to six months to close.
Exploratory drilling in Hackett River has already confirmed
around 60 million tons of ore containing zinc, silver, copper, lead
and gold, with about 5.2 million tons of zinc equivalent, found in
deposits that can be mined via an open pit, Xstrata said in a
statement.
Xstrata Zinc Canada Chief Executive Manuel Alvarez said, "This
transaction, added to the extension of the life of our Brunswick
Mine and the development of the Bracemac-McLeod Mine, is consistent
with our strategy of increasing the life of Xstrata Zinc's
operations in Canada."
-By Alex MacDonald, Dow Jones Newswires; +44 (0)7776 200 924;
alex.macdonald@dowjones.com